Pensions  

L&G boosted by 30% jump in bulk annuity sales

Total annuity assets at Legal and General increased by 16 per cent during the third quarter of this year to £39.9bn, up from £34.5bn on the same period in 2013.

Nigel Wilson, group chief executive of Legal & General, said the sales demonstrated the strength and flexibility of the insurer’s franchise, more than offsetting reduced individual annuity sales with record bulk annuity transactions.

Following the pension reforms announced in this year’s Budget, annuity sales have been falling.

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L&G said that its individual annuity sales in the quarter reduced to £125m, down 61 per cent, with total sales in the nine months to September of £508m, down 53 per cent compared to the first nine months of 2013.

However, bulk annuity sales increased 29 per cent to £3.4bn in the third quarter, compared with £2.6bn a year ago.

In addition Legal and General completed the internal transfer of £1.95bn of annuities from with-profits to the shareholder fund in July.

In May, Mr Wilson said L&G expected to write growing volumes of bulk purchase annuity business to more than offset individual annuity reductions.

Elsewhere in the business in the last year LGIM’s total assets increased by £82bn from £594bin to £676bn.

International assets now exceed £86bn, and have trebled in the last four years.

L&G experienced net outflows in the UK index business.

Workplace savings passed the £10bn assets under adminstration milestone and Cofunds’ assets under administration in the last year increased by £11bn to £69bn. Direct investments total £4.6bn.

Mr Wilson said: “We remain confident in our ability to deliver economically and socially useful products for our customers and strong and sustainable growth for our shareholders.

“Recent market volatility is a reminder of the on-going market uncertainty that still exists and while no model can be completely immunised, we believe our strategy creates a high degree of resilience.”

emma.hughes@ft.com